One Year Out, IEM Traders Believe Dems Will Keep Next Congress

With about one year before the next Congress is seated, traders on the Iowa Electronic Markets (IEM) believe Democrats will still hold both chambers but with diminished majorities.

As of 8 a.m. Thursday, contract prices on the IEM's Congressional Control market showed a 75.4 percent probability of a Democratic majority in both chambers, and a 5.5 percent probability of Republican control. Contract prices showed a 21.5 percent probability of a Republican House and Democratic Senate, with a .8 possibility of a Democratic House and Republican Senate.

On the House Control market, prices showed a 73.9 percent probability that Democrats will control the chamber but with a diminished majority, a 1.5 percent probability they will build on their majority, and a 25.1 percent probability Republicans will take control.

On the Senate Control market, prices showed a 91.5 percent probability that Democrats will control the chamber but with a diminished majority, a 3.4 percent probability they will build on their majority, and a 6 percent probability Republicans will take control.

The IEM is operated by The University of Iowa's Tippie College of Business as a real-money futures prediction market. Begun in 1988, the IEM is a research and teaching tool that has achieved an impressive prediction record, substantially superior to alternative mechanisms such as opinion polls. Such markets have been significantly more accurate than traditional tools in predicting outcomes ranging from political election results to movie box office receipts.